Insiders Of An Insolvent Company May Not Be Able To Keep Debt Repayment

          New Hampshire, like most states, has a Uniform Fraudulent Transfer Act, which addresses when transfers of assets of an insolvent company can be reversed for the benefit of other creditors.  N.H. RSA 545-A, in part, allows a general creditor to take back a legitimate debt repayment to an insider of an insolvent company.  For example, if the president of a company has loaned money to the company, the president may believe that as long as she clearly documents the loan transaction with a signed promissory note, then repayment to her of that loan before other creditors are paid is permitted.  That may not be the case if the creditor can prove the repayment of the debt to the president was made within one year of the filing of the creditor’s action or the company was insolvent at the time of the transfer or was made insolvent by the transfer; and the president did not give additional value to the company,  If these conditions are met, the creditor may be able to recover that money for repayment of his own debt even if the president  only had a portion of his debt paid back and is still owed money by the company.

          In such  circumstances, the creditor owed money may want to seek legal counsel to discuss the possibilities of pursuing a claim for the amount of the debt repayment to the officer as a voidable transfer under N.H. RSA 545, in addition to filing a regular debt collection action against the company,

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